P$8-2.$ PPE capitalization $($L$.$O$.8-1)($Medium $20$ minutes$)$

Mike$$s Lemonade Stand $($MLS$)$ purchased a parcel of land for $$10,000,000$ on March $31.$ The site was available at a reasonable price. The company has a strategic plan to build a large warehouse in the area some time in the next five years. The real estate agent representing MLS was paid $$50,000.$ Title search and legal fees were $$40,000.$

MLS paid a fee to have the site rezoned for use as a warehouse rather than for residential use: $$100,000.$ The company paid the seller $$30,000$ for the unexpired portion of property tax on the site. This property tax expires on June $30.$ Property tax for the last half of the year was $$70,000.$ A number of abandoned homes on the site were demolished for $$90,000.$ In the process of demolition, MLS received $$15,000$ for items salvaged from the homes.

As the site will remain vacant for a few years, MLS spent $$200,000$ landscaping it and putting in a sports field. MLS did this as part of a deal with the local residents so they would support the rezoning application. MLS spent $$10,000$ on food and entertainment to host a groundbreaking ceremony for the park opening. Senior managers and the president visited the party and were paid $$5,000$ in salaries while there. The company further spent $$35,000$ to advertise their good corporate citizenship using the example of the park and ceremony. During the remaining part of the year $$20,000$ was spent to maintain the field. MLS erected fences for $$55,000$ around part of the site to prevent children from harming themselves.

MLS spent $$25,000$ on consulting fees to determine where the most appropriate site for the warehouse should be$.$ Numerous sites were identified, including the one purchased.

Required:

Identify whether or not and to which account MLS should capitalize each of the above expenditures. Briefly justify each of your responses. $[$Hint: Some of these costs may be capitalized as site development costs.$]$